Online personal loan scams are continuing to increase in frequency as more and more of our activities are done online. Scammers posing as legitimate lenders lure unsuspecting victims into either paying fees for loans that never come or providing personal information used for purposes of identity theft or both. Many people fall prey to these scams because they trust the advertisement because they see it on a legitimate website or in other legitimate media.  It is important to remember that just because the media carrying the ad is legitimate, does not mean that the lender is legitimate. Most online advertising is purchased from third party companies that provide the ads to the website where the ad may appear and often these advertisements are not vetted before being placed.
Legitimate lenders rarely ask for advance fees.  They usually deduct fees from the loan amount.  Check with your state’s attorney general or the FTC if you have questions about an unfamiliar lender and if the loan requires an advance fee, don’t do it.  Chances are it is a scam.  Also, even if you don’t have to pay an advance fee, always be sure the lender is legitimate before you provide any information such as your Social Security number which could be going to an identity thief who is merely using the promise of a loan as a ruse to obtain personal information from you. All legitimate lenders require a credit check before making a loan so if the lender with which you are dealing does not require one, it is a red flag that it is a scam. Payday loans generally do not require a credit check, but those loans, while legal are often predatory and should be avoided if at all possible. Additionally, many of these personal loan scams originate in countries where English is not the primary language. Check out any advertisements or communications from lenders for spelling or grammatical errors which often can be an indication that the loan being offered is a scam.
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